A guest article from our sister company Cloud9 Umbrella
What has changed?
The Spring Budget 2016 has confirmed there will be restrictions for contractors who are claiming travel, subsistence and accommodation expenses, starting from 6 April. From now on, Cloud9 Umbrella will have to assess all of our workers, and determine their Supervision, Direction or Control (SDC) status. This will help us ensure that every individual is assigned to the most suitable new umbrella model.
Essentially, if you fall under SDC, you will no longer be able to claim your business expenses as tax relief when working through an intermediary (such as an umbrella company).
If you do not fall under SDC or are a ‘mobile worker’, you may be able to continue claiming expenses. If you are a ‘mobile worker’ and travel to and from temporary sites (away from your work base), you may be able to claim your mileage expenses through the Cloud9 Mileage Model.
How, what and when you claim your expenses has also changed, in accordance with the Financial Act 2015. Travel and subsistence expenses can only be claimed via our ‘Cloud9 Fixed Expenses’ Model, in order to be compliant with the restrictions introduced on salary sacrifice, if you are eligible.
Without using the new world models, contractors outside of SDC can still claim their travel and subsistence via a P87 at the tax year-end, or via self-assessment, which we will be able to assist you with.
Supervision, Direction or Control (SDC)
To help you with the recent changes in legislation, we have created some new, useful content that explains SDC and will help you understand your own personal status.
New world umbrella models
Cloud9 Umbrella are a fully compliant umbrella company. We have been working closely with Professional Passport and APSCo to design ‘new world’ umbrella models for clients who are inside and outside of SDC.
Personal Service Companies (PSC)
Those who are operating through a Personal Service Company (PSC), and fall under IR35, will not long we be able to claim tax relief on Travel and Subsistence. This rule will come into effect from 6 April 2016 and was reiterated in this year’s Budget.
Get in contact
Setting up a limited company
In some situations, contractors may find that setting up a limited company is more suitable for their circumstances. K&B Accountancy Group are specialist contractor accountants and we are offering free consultations for those looking to set up a limited company. Please call our team on 020 7078 0211.
Working with an umbrella company
The Cloud9 Umbrella team are ready to help you! Our sister company is offering a free consultation with one of their industry experts to help you determine your SDC status. In many cases, it may not be straightforward to determine whether you are supervised, directed or controlled within your working practice – which is why they are here to help. Please call Cloud9 Umbrella on 020 7078 0212, or contact them here.